A 3238 New Jersey General Assembly · 2026-2027 Regular Session

Eliminates statute of limitations on income tax assessments that arise out of erroneous refunds induced by fraud.

This bill eliminates the 3-year time limit for New Jersey tax authorities to reassess income tax when a taxpayer received an erroneous refund due to intentional fraud. It directly affects taxpayers who intentionally filed false returns to obtain extra money back from the state. The key change removes the previous 3-year deadline, allowing tax assessments at any time for cases where fraud caused the refund. This applies only to deliberate fraud, excluding accidental errors, negligence, or reliance on incorrect advice. The law retroactively covers cases from the five years before the bill's enactment.

Issues: ✓ Budget & Taxes

Bill status passed 3 of 5 stages cleared

Introduction

Jan 2026

Committee Review

May 2026

General Assembly Passage

Mar 2026

Senate Passage

Governor

Introduced Jan 13, 2026 Last action May 4, 2026

Maddy AI version diff · 1 comparison

What changed between versions

Technical Review Of Prefiled Bill → Introduced · 3 edits · Jan 13, 2026

MINOR

This diff reflects a procedural transition from technical review to introduced status, along with the addition of a formal statement section explaining the bill's purpose. The substantive operative text of the bill appears unchanged. The added statement clarifies that the bill would eliminate a conflict between two fraud exceptions in New Jersey's Gross Income Tax Act by removing the five-year statute of limitations on assessments for erroneous refunds induced by fraud, aligning it with the existing rule that allows assessment at any time for fraudulent returns.

TECHNICAL

Bill status changed from 'As reported by the Assembly State and Local Government Committee with technical review' to 'Introduced Pending Technical Review by Legislative Counsel,' indicating a procedural stage change.

SCOPE

A statement section was added explaining that the bill would eliminate the five-year statute of limitations on assessments for erroneous refunds induced by fraud, allowing the Division of Taxation to assess at any time if a false or fraudulent return with intent to evade tax is involved.

DEFINITION

The statement clarifies that 'false or fraudulent return' would not include inadvertence, reliance on incorrect technical advice, honest difference of opinion, negligence, or carelessness, and that the term 'misrepresentation of a material fact' would be eliminated from the statute.

Floor votes

How they voted

This bill passed the General Assembly by voice vote (no roll call recorded).

Full legislative history

Actions timeline

Total actions

Key actions

Committee

May 4, 2026

Committee

Received in the Senate, Referred to Senate Budget and Appropriations Committee

upper

Mar 23, 2026

Lower · Passed

Passed by the Assembly (68-2-0)

lower

Mar 16, 2026

Lower · Passed

Reported out of Assembly Committee, 2nd Reading

lower

Jan 13, 2026

Introduced

Introduced, Referred to Assembly State and Local Government Committee

lower

2 primary · 1 co-sponsor